Fed chair says he used first year to gain trust for bank
WASHINGTON — Federal Reserve Chairman Jerome Powell said Wednesday that he has used his first year as chairman to make sure the central bank deserves the trust of the American people, especially at a time when people are losing faith in big institutions.
Powell acknowledged that at the moment “we are paddling against the current” in an effort to restore the public’s faith in large institutions like the Fed.
He said to achieve this goal he has tried to emphasize outreach to members of Congress, which oversees the central bank. He also said he is making his speeches and other Fed communications as jargon-free as possible.
Powell spoke to teachers gathered in the Fed’s giant boardroom in Washington in an event that was also webcast to other groups of educators gathered at the Fed’s regional banks around the country. The education town hall was begun by former Fed Chairman Ben Bernanke and continued by his successor Janet Yellen as a way to boost interest in economics education.
In his remarks, Powell did not discuss the path of interest rates. At the Fed’s meeting last week, the central bank sent a strong signal that it is ready to take a pause in hiking rates after nine rate increases over the past three years, including four hikes last year.
Powell also did not address the sharp criticism that President Donald Trump leveled at the Fed last fall at a time when the stock market was falling sharply, a sell-off that Trump blamed on the Fed’s rate hikes.
Powell and Fed Vice Chairman Richard Clarida had dinner with Trump at the White House on Monday along with Treasury Secretary Steven Mnuchin. Mnuchin said the discussion covered a wide range of subjects from the state of the economy to the Super Bowl but that Powell did not send any signals about the future path of interest rates.
In an interview Wednesday with CNBC, Mnuchin said that he had set up the dinner on Friday at Trump’s request.
First word of the dinner came from the Fed, which put out a statement Monday saying that Powell “did not discuss his expectations for monetary policy” during his meeting with the president.
“The Fed chair was very consistent in what he said to the president with what he’s been saying publicly in his press conferences,” Mnuchin said in a CNBC interview Wednesday. “I thought it was a very productive meeting. It was a casual meeting. And we enjoyed a wide range of topics with the president in the residence.”
In addition to the the dinner with Trump, Mnuchin holds regular weekly meetings with Powell to discuss economic issues.
“As it relates to the dinner with the president, there were no preset parameters,” Mnuchin said. “I think Jay Powell is very clear that he wasn’t going to say anything in private inconsistent with what he said publicly.”
Powell on Wednesday praised teachers for their work teaching economics to high school students, saying when he was in high school economics was not taught.